VZCZCXYZ0018
PP RUEHWEB

DE RUEHAM #0454/01 0560945
ZNR UUUUU ZZH
P 250945Z FEB 10
FM AMEMBASSY AMMAN
TO SECSTATE WASHDC PRIORITY 6951

UNCLAS AMMAN 000454 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EAID JO
SUBJECT: JORDAN SCENESETTER FOR SENATOR JOHN KERRY 
 
¶1. (SBU) SUMMARY:  Embassy Amman warmly welcomes the visit of 
Senator John Kerry.  We have confirmed meetings with King Abdullah 
and Palestinian Authority President Mahmoud Abbas. 
 
¶2.  (SBU) SUMMARY CONTINUED:  The end of 2009 was marked with a 
flurry of political changes in Jordan, with the King dissolving the 
parliament in November.  Separately, he dismissed the cabinet and 
named a new Prime Minister, who formed a new cabinet, in December. 
The new cabinet, in accordance with the constitution, has begun 
issuing "temporary" laws in the absence of parliament, as a way to 
move its agenda forward until parliamentary elections, scheduled to 
take place during the fourth quarter of 2010, occur.  Regional 
tensions continue to capture the attention of the Jordanian 
leadership, particularly the stalled peace negotiations between the 
Palestinians and Israelis and the situation regarding Iran's nuclear 
program, two issues seen as linked by Jordanian interlocutors.  In 
addition to domestic and regional security concerns, Jordan's 
leadership is preoccupied with managing a tight budgetary situation. 
 The 2010 Jordanian budget includes $7.7 billion in expenditures, a 
$1.43 billion deficit before grants, and 20% cuts in capital 
expenditures.  As a result, GOJ agencies are curtailing spending, 
reducing or eliminating some price subsidies, increasing some taxes 
and fees on residents, and seeking additional financial and 
technical assistance from the USG and others.  END SUMMARY. 
 
Domestic Political Changes 
-------------------------- 
 
¶3. (SBU) The King constitutionally dissolved the Parliament in late 
November 2009.  The parliament was widely perceived as ineffective. 
Cooperation between the then-cabinet and parliament had deteriorated 
to such an extent that only a minimal amount of legislation was 
offered for parliamentary consideration, most of which was stymied 
or, if approved, mangled in the process, according to parliamentary 
observers. 
 
¶4. (SBU) Following the King's dissolution of the parliament, he 
exercised a constitutional clause which allowed him to extend the 
normal constitutionally required four-month window for new 
elections.  He also established a ministerial-level committee to 
consider electoral law reforms; the existing election law has been 
criticized for privileging rural, East Bank communities over urban 
communities with large Palestinian-origin populations during the 
2007 election.  The King announced that parliamentary elections will 
be held in the last quarter of 2010. 
 
¶5. (SBU) In early December, the King accepted the resignation of 
then-Prime Minister Nader Dahabi and appointed to replace him 
entrepreneur Samir al-Rifa'i, who is a former official and advisor 
to the King in the Royal Court, Foreign Minister Judeh's cousin, and 
the son of former Prime Minister and Upper House Speaker Zayd 
al-Rifa'i.  In his designation letter to Rifa'i, the King 
emphasized, among various reform efforts, the need to fight 
corruption. 
 
¶6. (SBU) Along with the new Prime Minister, a new 29-member cabinet 
was named and officially sworn in on December 14.  Local 
commentators note a lack of new faces in the cabinet, with 13 
returning ministers and seven who served in previous governments. 
In the absence of a sitting parliament, the new government has begun 
to pass so-called "temporary laws" or legislation enacted without 
parliamentary approval, which will theoretically be subject to 
parliamentary re-evaluation once new members are elected and seated. 
 Some commentators see this as a way for the government to pass 
legislation which otherwise would not have made it through a sitting 
parliament.  For example, much needed tax reform laws, which the 
previous parliament opposed, were recently enacted as well as a law 
on renewable energy. 
 
¶7. (SBU) On February 17 the government announced a National Action 
Plan that is the product of extensive late January meetings by nine 
ministerial committees and includes over 250 programs designed to 
increase government accountability, promote investment, expand civil 
and political participation, and improve public services. 
Commentary was mixed, with supporters praising its performance based 
approach and critics saying that it failed to address elections laws 
or lay out concrete recovery steps. 
 
Middle East Peace 
----------------- 
 
¶8. (SBU) King Abdullah has said publicly that the lack of progress 
is the greatest threat to stability in the region and hurts U.S. 
credibility.  King Abdullah further asserts that the lack of 
meaningful progress hurts the ability of the United States to 
advance its interests on multiple issues in the region, including on 
Iran.  Jordan considers settlement activities, home demolitions, and 
evictions in Jerusalem to be particularly destabilizing and 
unhelpful in restarting negotiations.  The King has a keen interest 
in preserving Jordan's role in administering the Haram 
al-Sharif/Temple Mount complex in Jerusalem and in overseeing other 
Islamic and Christian holy sites in Jerusalem. 
 
¶9. (SBU) The King remains a resolute advocate of a two-state 
solution and has responded positively to his engagements with SEMEP 
Mitchell.  Jordanian officials consistently express concern that 
Jordan will be asked to assume some form of responsibility for the 
West Bank, a proposition that King Abdullah consistently rejects, as 
does an overwhelming percentage of the Jordanian public.  Many 
Jordanians currently believe that Israel is unwilling to move 
forward on peace negotiations. 
 
Iran 
---- 
 
¶10. (SBU) Jordan has expressed concerns regarding Iran's nuclear 
program.  Some Jordanians link Iran to regional instability and 
terrorist organizations Hamas and Hizbollah and argue that regional 
consensus on Iran depends on meaningful movement on 
Palestinian-Israeli peace negotiations. 
 
Iraq and Afghanistan 
-------------------- 
 
¶11. (SBU) Jordan plays a positive role in regional security efforts, 
including in Iraq and Afghanistan.  Jordan supports a conditional 
U.S. withdrawal from Iraq that prevents chaos in Iraq, which would 
impact Jordan, and which limits the Iranian influence there. 
Despite local press reporting on Jordan's role in Afghanistan, 
Jordan will continue its security cooperation in Afghanistan. 
During your audience, the issue of Jordan providing further support 
in Afghanistan in exchange for additional economic assistance 
through an anticipated Afghanistan supplemental appropriation may 
come up. 
 
¶12. (SBU) Jordan hosts numerous Iraqis who have fled the conflict 
and its after-effects and has provided them with access to some 
social services.  The GOJ emphasizes that hosting the Iraqis has 
been a burden on the budget, and Jordan has received international 
aid to ease their already tight fiscal situation.  Jordanian 
officials have previously placed the number of Iraqi refugees 
between 450,000 and 500,000, but most international organizations 
and NGOs working with the refugees estimate numbers are 
significantly lower, in the 100,000 to 200,000 range.  Displaced 
Iraqis in Jordan are integrated and live within Jordanian 
communities, not in refugee camps. 
 
Budget Challenges 
----------------- 
 
¶13. (SBU) Your visit also comes as Jordan faces a difficult budget 
environment.  The 2010 budget includes $6.74 billion in projected 
revenues and $7.71 billion in expenditures and has a $1.4 billion 
deficit before grants, which is 5.8% of Jordan's GDP (estimated at 
$24.7 billion for 2010).  The 2010 budget features 20% cuts to 
capital expenditures and 1.4% cuts to current expenditures and will 
impact GOJ agencies by curtailing their ability to hire new 
employees and forcing additional cuts in overtime, official travel, 
and purchases of vehicles and furniture.  Existing reform and 
development projects requiring new staff and/or construction will 
also face financial constraints.  Weak growth in 2009 will translate 
to lower income and sales tax revenues this year (taxes on 2009 
income will be paid in 2010).  This along with a downward trend for 
the collection of land sales and other fees by the GOJ in 2010 
portends an even more precarious budget situation during the second 
half of 2010.  This budget environment has already resulted in 
additional requests from the GOJ for financial and technical 
assistance. 
 
Assistance MOU 
-------------- 
 
¶14. (SBU) On September 22, 2008, Jordan and the U.S. signed a 
memorandum of understanding (MOU) related to development, economic, 
and military assistance.  The agreement laid out a five-year 
non-binding annual commitment of economic support funds (ESF) ($360 
million) and foreign military funds (FMF) ($300 million).  The FY 
2011 OMB budget submission includes $360 million in ESF and $300 
million in FMF for Jordan.  In 2009, Jordan secured $150 million in 
supplemental appropriations legislation, to be forward financed from 
the 2010 expected commitment of $300 million. 
 
¶15.  (SBU) A side letter to the assistance MOU spelled out the joint 
intent to expand cooperation in the political and economic arenas. 
The side letter draws on the 2006 Jordanian "National Agenda" reform 
plan and identifies areas of mutual cooperation to be discussed in 
separate economic and political bilateral dialogues.  A bilateral 
political dialogue meeting focused on equality for women under the 
law, media freedom, religious tolerance and freedom, prison 
conditions and inmate treatment, good governance, and a strong civil 
society was held in Amman in January 2010.  The delegation was led 
by NEA Principal Deputy Assistant Secretary Schlicher with 
participation from Assistant Secretary Posner from the Bureau of 
Democracy, Human Rights, and Labor, and Director of Policy Planning 
Slaughter.  GOJ officials have proposed the bilateral economic 
dialogue take place in April in Washington. 
 
 
Beecroft